Is Huatulco Becoming Overdeveloped?
Source: The Eye Magazine March 2023
Interview With Lanny Berner CEO Of Segovia International Real Estate Conducted by Jessica Freebairn
What is Segovia?
Segovia International Real Estate is a 100% Canadian company owned by myself and Heidi Berner. Segovia has been in Huatulco since 2006 and the majority of our clients are Canadians. Segovia has been responsible for both major developments and many single-family homes.
Do you think Huatulco is becoming overdeveloped?
To answer that, a person needs to understand why Huatulco was developed in the first place. Fonatur, which also developed other Mexican tourism destinations such as Cancún and Ixtapa, was the major driving force to develop Huatulco. Fonatur is an economic development fund created and funded by the Mexican federal government.
The sole purpose of Fonatur was to create employment for residents by developing tourism in the southern states of México. The state of Oaxaca in particular desperately needed some economic development as Oaxaca was always one of the least affluent states in the republic. Looking specifically at Huatulco, before Fonatur came here there was not much here. Very few schools, if any. Only very basic healthcare. No jobs. When Fonatur started to develop Huatulco people were able to work and provide for their families. The continued development of Huatulco is what provides jobs here. There are jobs for locals in restaurants and hotels but that was all a result of Fonatur spending millions of dollars to develop the area.
Fonatur is still responsible for the majority of the upkeep of Huatulco. All property owners pay property tax to the municipality but it is Fonatur employees cutting the grass, raking leaves, and cleaning the streets. Without Fonatur, Huatulco would not be what you see today.
So do we think Huatulco has too much development?
Perhaps that question is better asked to the thousands of families who depend on the construction industry for a living. The money they earn in the construction business is what puts food on the table and pays to educate their kids. If and when that development stops so does the cash flow to thousands of families.
So no, we do not think that there is too much development. As much as some people like to think that development is taking away their private beach they like to go to when they are here on vacation, those people need to look at the big picture and consider what exactly the thousands of families who depend on the income generated from the development would do if further development stopped. The vast majority of people working on the development sites are not college-educated people. They are just good hard working people who want to support their families and there are not a lot of jobs here for non- college-educated people other than construction.
All of our employees whether office or on- site construction have health care paid for them as part of their benefits program. If they were not working the majority of those families would not have healthcare coverage at all. So many people come to work with us as everyone in the family is covered.
What is your opinion about the water shortage in Huatulco, and will continued development hinder the water supply?
Certainly the water situation is an important issue. We plan to be the first institution (government or private) to install a desalination plant in Huatulco to take the water from the ocean and convert it to drinking water. It will be a long process because of the environmental permits, but it is being worked on.
In the meantime, we do everything we can to be efficient in the use of water including recycling of gray water and even black water. It is not a complete solution but every bit helps and one day desalination plants will be a reality.
How many local people do you employ?
In 2022 we were employing more than 600 people in Huatulco including office staff and onsite construction. This year, 2023, we plan to have close to 1500 people working with us.
Who benefits from development here in Huatulco?
The list of people who benefit from development in Huatulco is very long. Of course, all the families that we spoke about earlier but it’s much more than that.
All of the businesses that sell building materials such as cement and rebar have employees who have families who benefit. The municipality benefits as we pay a lot of fees for licenses and that money is used for municipal projects. The municipality also has many employees. The restaurants, grocery stores, bars, and any other place where our employees spend their wages all benefit. The money invested in these developments trickles down to many many people.
Please explain more about Fonatur & the municipal government.
We have very good relationships with both Fonatur and the municipal government, and work to do exactly what Fonatur was designed to do. Develop Huatulco and create jobs. The municipal government also benefits because every timewedoanew development it expands the property tax base in Huatulco and that tax base needs to grow substantially over the next 5 to 10 years so that the municipality can one day be self-sufficient. Of course, any business entity that creates jobs is always welcome in any town anywhere in the world.
Do you all work with Semarnat (the Environmental Department)?
Yes, we do. Semarnat is the Environmental Department here in Huatulco. We have always had a positive relationship with Semarnat. Way back in 2007, we were one of the first companies here to consistently do environmental studies and wait for permits before we started to build.
While the permit process can be slow it is essential that all developers as well as all the people who live here follow the environmental rules. Without the guidelines set forth by Semarnat and the enforcement of those rules, Huatulco would not look like it does. Semarnat has very stringent controls over what a developer can and can’t do. Segovia always does everything necessary to protect and preserve the local natural flora and fauna.
What do you see for the future of Huatulco?
We see a very positive future for Huatulco. Over the last 15 years that we have been active here we have seen some dramatic changes. Fifteen years ago there was no Chedraui or Soriana. No OXXO stores, no Auto Zone, etc. There are now more than 800 licensed places to eat in Huatulco.
So there are a lot more services here, which makes life easier and less expensive than it was before. That attracts more long term tourism because foreigners can come and stay in Huatulco for six months and find almost everything they might want at a reasonable price.
As more and more foreigners and Mexican nationals move to Huatulco the demand for more services increases which presents more business opportunities and more jobs for local people.
It is very important that we keep Huatulco clean, safe and prosperous. A strong local economy is good for everyone. A high level of unemployment is never a good thing for a community and we see the demand for skilled and unskilled workers increasing over the next few years.